Senator Warner says it appears the long-awaited results of the “stress tests” performed on leading U.S. banks are more positive than many had expected. The tests reportedly have concluded that the nation’s 19 largest banks have enough capital in reserve but may need to strengthen their holdings to absorb potential future losses.

Senator Warner was interviewed about the “stress tests” on Bloomberg TV today:

I’m generally more optimistic.  I think the range, from the $30+ billion for [Bank of America] to some of the needs of the other numbers – that’s doable.

I am anxious to see how much detail we’re going to get…. I think the more information, the more transparent, the better.  

There are some real questions about the stress test, but I remind the viewers that what these stress tests do is not only look at the worst case in terms of unemployment, but [also] a decline in economic growth, and decline in housing prices.  They take a stressed-out situation in all three categories and assume that will hold for two years.  Maybe the test can be a little more stringent, but generally speaking, I think they’ll give a pretty good snapshot of where these banks are.

According to the Washington Post:

The 19 banks, which together hold two-thirds of the nation's deposits, were required to provide regulators with reams of data detailing loans and other commitments. The banks also estimated loan defaults and losses through the end of 2010, based on a moderately bleak economic forecast provided by the government. Finally, regulators adjusted the findings to ensure comparability among firms